Sikkim is fast becoming businessmen's most favourite state. Twelve cigarette companies have received industrial licences for setting up factories in the state, out of which three, namely, ITC, Golden Tobacco and National Tobacco, have already started production. The two cosmetics firms with factories of their own in the state - Lakme and Ponds - will soon be joined by Godrej and four others.

Sikkim has been offering the usual tax and duty exemptions given by most other states to attract industries, but the concession in respect of central excise duty seems to be the main attraction: goods sold within the state are exempt from central excise, which partly explains the rush of cigarette companies to the state. Over 50 industrial licences, covering mostly medium sized units, are currently at different stages of implementation and more offers are pouring in.

Double Think

The Steel Ministry is in two minds - whether to go ahead with the controversial Daitari steel project in Orissa which should have been in full swing by now, or call it a day and drop it. It continues to receive offers of collaboration from foreign parties, the latest being from British Steel Corporation, the state-owned body that is having troubles of its own and is said to be losing over Rs 10 crore a week.

After burning its fingers in the deal with Davy United, the Steel Ministry is said to have decided not to take any further steps until the completion of a detailed project which Metallurgical and Engineering Consultants (Mecon), a government consulting firm, has been asked to prepare. There are strong rumours that the project may be shelved for the time being on the grounds of paucity of finance, though Minister for Steel Narain Dutt Tiwari insists that it will go through.

A Diamond Deal

The diamond export industry, which may soon overtake engineering as the country's largest exporter, has asked the Government for assistance in setting up a diamond bourse or chick on the lines of those existing in Belgium and Israel, India's main competitors in the international diamond trade.

The bourse is to be located in Bombay where the diamond trade with an import-export turnover of Rs 1,300 crore a year is centralised. In the meantime, the Centre has agreed in principle to permit diamond exporters to maintain dollar accounts. The proposal, which is now receiving finishing touches at the Reserve Bank, will save heavy arbitrage charges and will also reduce risk of loss owing to fluctuations in exchange rates.

Digestive Process

ITC Ltd which has recently spread its wings from cigarettes and hotels to take in cement and paper seems to be on a take-over spree, having apparently decided that it is more economic - and profitable - to take over old companies and run them instead of starting from scratch with brand new units.

After the controversial acquisition of India Cements and Ashok Paper the group is said to be showing interest in Binny, the 100-year-old Madras-based textile company that has been virtually defunct for the last few years. Company sources say that although it has plans to enter new lines including engineering, chemicals and electronics as part of its massive Rs 300-crore investment programme in the next 10 years, it will not take the next step until it has digested the new acquisitions.

Credit Worthy

India is rated number six among Asia's most credit-worthy borrowers, according to Data Resources Inc, a US research firm. Hong Kong tops the list as the best credit risk, followed by Taiwan, Singapore, Thailand and South Korea. In compiling the score, the firm has given the most weight to two factors: one is the country's debt servicing as a ratio of exports (9.9 per cent in the case of India against only 0.4 per cent for Hong Kong) and the other is foreign debt as a proportion of gross national product (GNP) (12.9 per cent for India against 2.2 per cent in the case of Hong Kong). Surprisingly, Philippines has received the poorest rating.

Polyester War

A battle is on between the "polyester lobby" led by textile baron Dhirubhai Ambani of Reliance Textiles and polyester yarn users, the texturising and crimping industries. For more than three years the high-priced yarn was listed on the open general licence import list, and importers have been having a field day. But recently Reliance set up a yarn manufacturing unit, and Ambani has turned the pressure on policy makers to either curb imports or hike import duties.

Last fortnight the all-India Crimpers' Association launched an attack on domestic manufacturers through advertisements headlined: "Should the country's texturising industry be allowed to die?" And "Please don't dump us". They argued that domestic manufacturers harm users with high prices. Last week, Ambani and his lobby appeared to have won. The Government has reportedly raised the basic duty on polyester yarn by Rs 15 per kg, which is expected to curb dumping substantially.

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